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Extended withholdingtax in Nigeria

I need some assistance with SAP withholding tax config. Our company will start trading in Nigeria soon where withholding tax is applicable on all local services. Problem is that we cannot claim input vat on these local services and the vat is therefore expensed to the P&L. However, the withholding tax base needs to be Vat exclusive. How do I config the "revised" withholding tax base amount?

Your assistance is much appreciated. Please advise if you require additional info.

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  • author's profile photo Former Member
    Former Member
    Posted on Feb 02, 2012 at 09:04 AM
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  • Posted on Feb 01, 2012 at 04:03 PM

    Hi,

    Please confgure a new EWT type, where in defenition screen, you need to choose Net Amount under Calculation->Base Amount

    IMG->FA->FAGS->WT->EWT->Calculation->WHT type->Define WHT type for Invoice posting

    IMG->FA->FAGS->WT->EWT->Calculation->WHT type->Define WHT type for payment posting

    Regards,

    Srinu

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    • Former Member Former Member

      Hi

      Follow the instructions given by Srinu then create a vat code with NVV account key

      NVV always adds the amount to expense line item, in your case consulting fee and it will calculate on 100 only not on 105

      Reg

      Vishnu

      Edited by: vishnu g on Feb 1, 2012 5:42 PM

  • Posted on Feb 02, 2012 at 08:42 AM

    Dear Sonja,

    into the WT type definition You can ask for excluding the vat from the WT base amount calculation.

    You can define the WT BASE amount as Gross, net and so on.

    If this information does not help You,

    please kindly give me an example of what You need the System to calculate.

    Do You need the WT calculation at the invoice time or at the payment time?

    The example You reported before it is not so clear to me. What does it mean pay to vendor?

    Thanks.

    Mauri

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    • Former Member

      Hi Mauri

      I'm in the process of reviewing NVV Vat code setup as suggested by Vishnu so not sure yet if problem will be resolved.

      The business would prefer WT at invoice posting

      Example:

      Vendor invoice received shows consultings fees of R1000 and 5 % vat of R50 = Invoice total of R1050. Nigeria tax laws does not allow us to claim the input vat so it is expensed

      Current SAP Postings

      DR Consultings fees R1050(no vat code postings)

      CR Withholding tax R105

      CR Vendor R 945

      SAP posting required

      DR Consultings fees R1050

      CR Withholding tax R100 (10% of Vat exlusive amount)

      CR Vendor R 950

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